Everest Announces Cat Loss Estimate - Analyst Blog
July 07 2011 - 8:45AM
Zacks
Bermuda-based reinsurer Everest
Re Group Ltd. (RE) has announced
its estimate of April-May catastrophe losses (cat losses) based on
property damages resulting from cataclysmic weather
conditions.
Everest Re, as a property catastrophe
writer, expects after-tax cat losses of $80 million from a series
of severe storms that ravaged the U.S. in the months of April and
May, along with the wildfires in Alberta, Canada. Everest Re stated
that the estimates include updated provisions for first quarter cat
loss of nearly $10 million on account of the New Zealand
earthquake.
In the first quarter, Everest Re suffered
total pre-tax cat losses of $665 million, with the Japanese Tsunami
accounting for $400 million, New Zealand earthquake $200 million,
Australian flood $55 million and Cyclone Yasi $10 million. However,
net of tax and reinstatement premiums, the cat losses for this
quarter totaled approximately $531 million or $9.77 per
share.
Other insurers and reinsurers who
suffered losses from the early 2011 catastrophe include companies
like Allstate Corp. (ALL) and
Travelers Companies Inc. (TRV). While
Allstate expects net losses of $2.0 billion, Travelers anticipates
April-May cat losses in the range of $1.0–$1.05
billion.
According to experts, the April-May cat
losses would cost about $7.7–$12.5 billion to the industry. They
believe the insurers overall have already incurred heavy cat loss,
which is almost double the figure that was earlier predicted for
full-year 2011. We expect the market to harden as severe natural
disasters this year are pushing prices higher in the insurance
industry after years of sharp price
declines.
Everest Re will reveal all
the details on catastrophe losses in its second quarter earnings
report, which is scheduled for release on July 27, 2011, after the
market closes.
ALLSTATE CORP (ALL): Free Stock Analysis Report
EVEREST RE LTD (RE): Free Stock Analysis Report
TRAVELERS COS (TRV): Free Stock Analysis Report
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